The U.S. dollar slid 0.24% to close at 108.701 after hitting a two-year high last week. Traders are focused on upcoming U.S. economic data, especially December’s nonfarm payrolls report, for insights into the Federal Reserve’s monetary policy outlook.
Market participants should look towards upcoming speeches from Fed policymakers to further gauge their stances on inflation control.
Meanwhile, safe-haven demand for the dollar remains robust on the back of President-elect Donald Trump’s upcoming policies. Talks on the potential import tariffs, tax reforms, and immigration restrictions will likely sway the dollar’s movements moving forward.
Picture: USDX consolidates near support as momentum softens, as seen on the VT Markets app.
With traders eyeing upcoming Centra Bank discussions on rate cuts and jobs data, the dollar flattened to a close at 108.701, consolidating after failing to sustain gains above 108.88. The range-bound action still show lingering effects from the holiday-thinned volumes, which only serve to amplify small moves.
A break above 109.00 could signal further gains, while a slip below 108.65 may open the door for more bearish pressure.
The dollar has drawn sustained support from market anticipation that the Fed will hold off on aggressive rate cuts this year. Fed policymakers are expected to reiterate their commitment to taming inflation, lending further buoyancy to the greenback.
The USDX holds its ground as a safe-haven asset despite heightening market uncertainties. With speculation about Canadian Prime Minister Justin Trudeau’s resignation and retreat from the People’s Bank of China (PBOC), the dollar’s appeal is expected to grow from here.
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